According to the assignment rule, which of the following policy mixes is appropriate for a country with excessively low unemployment, a balance of payments surplus, and fixed exchange rates?

A. Contractionary fiscal policy and expansionary monetary policy
B. Expansionary fiscal policy and expansionary monetary policy
C. Contractionary fiscal policy and contractionary monetary policy
D. Expansionary fiscal policy and contractionary monetary policy


Answer: B

Economics

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If the price of inputs rises and foreign income rises:

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Figure 34-9 ? In Figure 34-9, at price OC

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Economics

The nominal interest rate in the U.S. is 5% and the nominal interest rate in Canada is 3%. The spot value of the U.S. dollar is 1 ($/Canadian dollar) and the forward rate is 1.2 ($/Canadian dollar). Which of the following is NOT true?

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Economics